Kimberly Clark Corporation
) is set to report fourth quarter and full year 2013 results on
Jan 24, 2014. In the last quarter, it delivered a positive
earnings surprise of 2.86%. Let's see how things are shaping up
for this announcement.
Factors to Consider
Kimberly-Clark's healthcare segment has been witnessing
decelerated sales growth since the last few quarters, thus
raising concerns. In the third quarter, the segment delivered
positive results for the first time after four quarters of
revenue decline. However, the increase was merely 2%
year-over-year. The company has thus decided to spin-off its
healthcare business that would allow it to optimize its
performance in the coming quarters.
The company has also been experiencing macroeconomic headwinds
for the past few quarters, which include lower consumer spending
patterns stemming from an unfavorable macroeconomic environment
and adverse currency rates. The rise in input prices also has a
direct impact on the company's profits.
The company is trying hard to combat the input costs
headwinds. Its cost saving program; FORCE (Focused on Reducing
Costs Everywhere) is helping it to save costs through lean
manufacturing and supply chain practices. Consumer spending and
disposable income are expected to increase by the end of 2014.
However, they will be volatile in the near term and will impact
full-year 2013 results.
Our proven model does not conclusively show that
Kimberly-Clark is likely to beat earnings this quarter. That is
because a stock needs to have both a positive
and a Zacks Rank of #1, 2 or 3 for this to happen. That is
not the case here as you will see below.
Negative Zacks ESP:
The Expected Surprise Prediction or ESP for Kimberly-Clark is
-0.71% as the Most Accurate Estimate stands at $1.39 per share,
while the Zacks Consensus Estimate is higher at $1.40 per
Zacks Rank #4 (Sell):
Kimberly-Clark's Zacks Rank #4 when combined with a negative ESP
makes surprise prediction difficult. We caution against stocks
with Zacks Rank #4 and #5 (Sell rated stocks) going into the
earnings announcement, especially when the company is seeing
negative estimate revisions momentum.
Other Stocks to Consider
Other stocks in the consumer staples sector that have both a
positive earnings ESP and a favorable Zacks Rank are:
W D Forty Co.
), with Earnings ESP of + 1.49% and a Zacks Rank #2 (Buy).
Newell Rubbermaid Inc
), with Earnings ESP of +2.17% and a Zacks Rank #3 (Hold).
Energizer Holdings, Inc.
), with Earnings ESP of +0.46% and a Zacks Rank #3.
ENERGIZER HLDGS (ENR): Free Stock Analysis
KIMBERLY CLARK (KMB): Free Stock Analysis
NEWELL RUBBERMD (NWL): Free Stock Analysis
WD 40 CO (WDFC): Free Stock Analysis Report
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